Scenes From a Layoff: Tears Flow Among the Kilns at a Tiny Tile Maker

MINERVA, Ohio -- Workers at Summitville Tiles Inc. gathered on the factory floor Wednesday morning to hear their boss -- using a bullhorn to pierce the cavernous space -- tell them he was laying off a third of the staff.

To pull through this crisis, owner
David Johnson
said, the company must "cut to the bone."

Huddled around half-century-old kilns for warmth, some workers masked their anxiety with nervous optimism. "I'll go back to hang drywall," said Dustin Bourne, a lanky 22-year-old, chatting with three high-school buddies. Of course, they all knew the truth: Mr. Bourne took a job here last year because drywall work had disappeared.

Tough Times for Tile Company

Tim Aeppel/The Wall Street Journal

Two Summitville Tile employees "face" tiles before they are stacked to go into the kiln.

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Rosanne Dangelo, a mother of two grown children, was stoic at the prospect of unemployment. "I'll get by," she said, then quipped, "I don't need the Internet."

The U.S. is losing jobs at a pace not seen since the 1940s. Monday alone, 65,000 fresh layoffs were announced at giants including Caterpillar and Home Depot.

But tiny firms like Summitville Tiles have an outsized role in employment. For the past decade, small businesses have created 60% to 80% of net new jobs. Small companies of 500 or fewer people employ more than half of the country's private-sector workers.

Many of these small companies are staffed with people who have spent their entire lives in one place, creating tight factory-floor communities, but also making it harder to land a new job.

"That woman's mother was my grandfather's secretary for years," said Mr. Johnson, the third generation of his family to head Summitville, pointing toward a worker packing boxes of tiles.

She'll keep her job, due to seniority. So will David Eick, who has been here nearly 11 years. But Mr. Eick's wife, Melanie, won't. She worked at Summitville for eight years, but fatefully left in 2007, then recently returned to be closer to friends. By leaving, she lost seniority.

Mr. Eick, 36, pulled Mr. Johnson aside with a nervous wave. "She's pretty upset," he said, dropping his voice. Mr. Eick said he might need to ask relatives to help cover the couple's $1,100 house payment if his financial condition worsens and his wife's layoff drags on.

Mr. Johnson's family owns Summitville Tiles and has been involved with the company since shortly after its founding in 1912. Summitville proudly notes that its staff has a cumulative 2,819 years on the job. In other words, the average worker has stuck around 14 years.

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The company's tiles line the floors of Washington, D.C.'s subway stations and Mexico's 7-Elevens, and protect the roof of the White House's East and West wings. But with the global economy in crisis, not much tile is being purchased right now.

Mr. Johnson, 49, spent much of last Tuesday huddled with his managers and his older brother, Bruce, trying to figure out how deep to cut. They settled on eliminating 59 jobs, almost a third of the staff.

Some managers urged deeper cuts, to avoid more layoffs later if the economy weakens further. But the counter view prevailed: Keep enough people to allow the lines to run smoothly and respond to rush orders.

It's not the first dark chapter in Summitville's history. In the 1950s, a pair of fires nearly destroyed the company. More recently, cheap imports from China and Turkey forced it into bankruptcy protection; it emerged only in 2004.

The 1970s and 1980s were glory days. The company employed 750 people at multiple plants. Traveling abroad, Mr. Johnson's father noted that one European ceramic maker used a castle as its guesthouse, so when he returned to Ohio, he bought a small, 19th-century inn with five guest rooms near his own factory, the Spread Eagle Tavern.

"That was its historical name," Mr. Johnson notes, somewhat emphatically. "Contrary to some people's thinking, it was not a house of ill repute."

The decision to slash staff weighs heavily on him. "These guys don't make a lot of money anyway, and we're taking away their livelihood," he said over dinner at the Spread Eagle Tavern the night before his factory-floor meeting.

The morning of the meeting, the temperature outside was four degrees. The factory is a drafty place, so people gathered near the kilns. Mr. Johnson set his bullhorn on a pile of tiles and delivered the grim news.

Fifty-nine jobs would be eliminated, based mostly -- but not entirely -- on seniority. People in key jobs, such as kiln operators, would stay.

He asked for volunteers, and told the assembled staff that the full list of layoffs would be released two days later, on Friday.

Mr. Johnson tried to strike a reassuring note. "There's one factory around the corner closing for good -- fortunately, that's not the position we're in," he said. He emphasized that he hoped this layoff would last only eight to 10 weeks. Employees would be guaranteed their old jobs and preferred shifts when they get called back. But he cautioned it was impossible to know when that might happen, given the unsettled economy.

Shannon Buck, a 23-year-old with a lip ring, was one of the few to cry during the meeting. Having worked only a few months, she has no savings. "I'll do what I can to find another job, do what I can," she said. "If all else fails, I can stay with my mom."

Many workers say they share Mr. Johnson's view that the economy will recover. There is reason for guarded optimism. Most of Summitville's products fill specialized niches. Among other things, the company makes what's known as hygienic non-slip tile floors used in restaurants, and heavy industrial flooring used in power plants.

It also makes "thin brick," which is fused into the pre-made concrete walls of commercial and government buildings to give the look of a traditional brick exterior. That type of affordable construction could revive quickly if banks start lending again, Mr. Johnson pointed out.

As soon as she heard the 59-person cutoff point, Ms. Dangelo, the mother of two, realized immediately she was "on the bubble." Everyone knows where they stand on the seniority list, given that it's posted on a wall beside the clock where people punch in.

But Ms. Dangelo went up and checked the list again, just to be sure. "I'm 57," she said, putting her in the group likely to be laid off. Then, her manager chimed in and corrected her -- actually she was No. 56, he said. Ms. Dangelo cringed.

Nevertheless, on Friday, the final cuts were announced, Ms. Dangelo kept her job. Seven people had volunteered for layoffs, even though they got no severance pay, only the promise to be hired back if things improve.

"I was saved," Ms. Dangelo said.

She didn't celebrate, however. For one thing, many friends' jobs weren't saved. In any case, she and her husband aren't in the mood these days. Celebrating, she said, is something "we cut out already."

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